Parties weigh in on Morrisey motion to recoup money from Frontier

CHARLESTON — Both the federal government and Frontier West Virginia want a court to reject an attempt by Attorney General Patrick Morrisey to intervene in a lawsuit to recoup money the state spent for Frontier’s mishandling of broadband construction.

In filings Friday in the U.S. District Court for the Southern District of West Virginia, the U.S. Attorney’s Office and Frontier West Virginia argue that the court should reject a motion to intervene filed Nov. 8 by the state Attorney General’s Office.

Attorneys for the company that brought the original suit against Frontier — Harrison County internet provider Citynet — said they have no objection to Morrisey’s motion, which requests that the court require Frontier to reimburse the state for $4.9 million in penalties and additional fees.

The Inspector General of the U.S. Department of Commerce levied a $4.7 million-dollar penalty against the state in 2017 after auditors discovered that Frontier marked up its invoices by as much as 35 percent and charged the state more than $4.2 million for indirect costs not approved by the federal Broadband Technology Opportunities Program grant. The West Virginia Legislature paid the $4.7 million penalty in May.

The Citynet lawsuit — filed in 2014 under the False Claims Act — accuses Frontier of misusing $40.5 million in federal grant funding to build a statewide broadband network only benefiting Frontier. The suit, called a writ of qui tam, allows citizens and private entities to file suit against companies they believe have defrauded the federal government.

In their response to Morrisey’s motion, attorneys for the federal government argue the False Claims Act prohibits third parties, such as the state, from intervening in the Citynet suit. They also argue that the state should file suit against Frontier directly to be compensated for the $4.7 million penalty.

“To be clear, the United States takes no position on whether the State would have a separate cause of action against any defendant (or any other person or entity) concerning conduct leading to the submission of the unallowable costs for reimbursement under the federal grant at issue here,” wrote Assistant U.S. Attorney Jennifer Mankins. “But the place for adjudicating such a dispute is a separate action that does not involve the United States.

Attorneys for Frontier filed a memorandum in opposition to the Attorney General’s motion to intervene. They argue that the Attorney General’s Office didn’t file the motion properly and the state wasn’t clear in their motion.

“It is unclear whether the State seeks to intervene as a defendant to seek recoupment from the federal government or as a plaintiff to seek recovery from (Frontier),” wrote attorney J. David Fenwick. “… It is unclear from which parties the State seeks to recover.”

Rebecca Pomeroy, attorney for Citynet, said the company had no issues with the Attorney General’s motion as long as long as it doesn’t interfere with Citynet’s ability to prosecute the case or recover any fees or costs.

“In essence, the State of West Virginia’s position is that it should be allowed to recoup its payments in the event the federal government recovers a second time for the claims upon which it has already received payment from the State of West Virginia,” Pomeroy wrote. “Citynet requests that this Court grant the State of West Virginia’s motion to intervene.”

In 2009, the state applied for a $126 million stimulus grant through the Broadband Technology Opportunities Program for broadband expansion in West Virginia. Frontier, the subrecipient of the grant, was supposed to build middle-mile fiber connections and allow competitors to also access these lines at lower rates.

Steven Allen Adams can be reached at sadams@newsandsentinel.com.


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